Invest Wisely to Reach your Goals | Value Research With time on your hand, you can meet your investment goals if you plan properly and invest in the right vehicles
The Plan

Invest Wisely to Reach your Goals

With time on your hand, you can meet your investment goals if you plan properly and invest in the right vehicles

I am 29 yrs old and my wife will be 27 in June 2015. We are based in Surat and have a monthly income of ₹1,00,000. We have monthly home expenses of ₹25,000. We invest ₹1,50,000 each in the PPF. My parents are 68 (dad) and 62 (mom) years old. My parents have medical insurance worth ₹15,000. My employer gives me medical insurance cover worth ₹1,00,000. My wife doesn't have either health insurance or life insurance. We do not have any long-term or short-term liability. We are planning to have only one kid in next one-two years.

I have LIC Magic Plan Retire and Enjoy with sum insured ₹13,18,000. The premium is ₹32,500 per annum till 42 years of age and then I will get approximately ₹1,25,000 as annuity per year with slight yearly increase. I also have LIC Jeevan Kishor worth ₹50,000 maturing on January 28, 2017.

Further, I have LIC Jeevan Vriddhi worth ₹50,000 and maturing on March 28, 2022.

What life insurance would you recommend for me and my wife? Also would you recommend any investment for my parents? What investment plan would you recommend for our disposable income of approximately ₹25,000 per month in order to meet the following goals:

  • Retirement
  • Child education
  • Marriage of our child
  • Emergency fund

I am not comfortable with buying direct equity but I am open to MFs and SIPs.
- Khushroo Dumasia

You have a long time and sufficient monthly savings to reach your goals if you invest wisely. Buy health insurance for all the members of your family and life insurance for working members. Invest systematically. While developing this plan, we have made assumptions as to the money values of your goals. You may increase or decrease the values and accordingly adjust monthly investments. For your retirement we have assumed 100 percent of your current expenses inflated at 8 per cent per annum. Life expectancy is taken to be 80 years. You will surely need more money if you survive longer.


  • Keep a sum equal to three-month expenses aside for emergency. Increase this sum to six months' expenses after the birth of your child.
  • Buy a family floater policy insuring you and your wife. Buy a ₹3 lakh cover and increase the cover to at least ₹5 lakh after the birth of your child. ICICI Lombard Complete Health Insurance - iHealth Plan and Apollo Munich Easy Health Plan are good plans.
  • The old age is more prone to ill health. Your parents do not need to make investments at this age. Buying a new insurance policy for them would be difficult and expensive. You may ask the existing insurer to increase cover to at least ₹5 lakh. Buy a larger cover if you have a family history of critical illness.
  • You have bought three insurance-cum-investment policies. Sadly, they are of little use. Magic Plan Retire and Enjoy is a combination of multiple pension plans from LIC. In your case, life insurance of ₹13 lakh is inadequate. Based on your details, you must buy a cover at least worth a crore. You may also need to increase your life cover during later years when your responsibilities and living standard rise further. For life insurance simply buy a term insurance. Aviva i-Life and HDFC Click2Protect are recommended plans.
  • Another of your policies is Jeevan Kishore. You are still planning for a kid. This policy is not meant for you. However, as the policy is nearing maturity, we recommend you to continue this plan and do not fall prey to such plans in future which are actually not required.
  • Your third policy is Jeevan Vriddhi. It is a single-premium endowment plan. At your age, the annualised yield, after considering premium including the service tax, comes out to 6.73 per cent. We have not considered any non-guaranteed additions here. Ten years is a long time to achieve better returns. You may surrender your policy now. The guaranteed surrender value is 90 percent of the single premium. Invest that sum in a mutual fund SIP.
  • All your goals are far away, which is good. You both are already contributing to the PPF, so do not go for debt investments. Large and mid-cap and mid- and small-cap funds will suit your goals. Start investing on a monthly basis through SIPs.


  • Do not invest or buy insurance without going through the policy documents in order to avoid investing in products which are unsuitable.
  • Your parents do not need to invest now as they have no goals to fulfill. Just make sure that they have adequate health insurance.

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